What Factors To Take Into Account When Calculating A Mortgage
According to data from the Bank of Spain, the lowest average interest rate in history was recorded in August, standing at 1.45%. But, INE data show that the average term of home mortgages in Spain is 23 years. Therefore, before acquiring such a long-term commitment, the interested party must analyze their financial situation. The experts at Grocasa Mortgages offer some keys to calculate the mortgage that best suits each case and to know if the payments can be made.
The first thing to know is the percentage that you can afford, avoiding over-indebtedness. Therefore, to assess whether a property is within reach, it is necessary to analyze the total percentage of the income it represents . In addition, we must not forget that there are other expenses apart from the mortgage payment, such as the IBI, community expenses or home insurance.
Some experts advise not to allocate more than 30% of income to housing, “but each case is different, and it is better to analyze it in depth. If, for example, you spend much more than normal on transport, perhaps you should not allocate more than 25%. Or you may be in a sector in which salaries are increasingly higher, in which case, you can still afford a higher mortgage, “they point out from Grocasa, so they recommend analyzing each situation individually.
Age makes the repayment time vary. The term of the mortgage, plus the age of the oldest holder, cannot add up to more than 75 years . Therefore, depending on the age, the interested party still has to assume a higher fee and, therefore, opt for a cheaper property.
Another aspect of calculating a mortgage, according to experts, is prior savings. And it is that one of the great barriers for many people when it comes to accessing housing is the entry of the mortgage . The more money you contribute, not only are there more chances of obtaining financing, but the fees will be lower and you will save in the long term in interest.
“Interest is applied to the total outstanding debt and, therefore, the lower the outstanding debt, the lower the interest, which means a lower fee or a shorter repayment period. If you can contribute a lot of savings, you may even be able to buy a house with a higher value, because you can also request a higher loan “, they point out from Grocasa.
In this context, they point out that hiring a mortgage from a mortgage broker can offer security that the debt contracted can be assumed.